RE: [CANSLIM] IBD Top 100

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] IBD Top 100
Date: Tue, 17 Jun 2003 18:22:48 -0500

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Hi Gene,

I can take any list of "good stocks" at any point in time and
*retroactively* choose the optimal time in the past to "buy and hold the
list," particularly if during that same period of time 95% of stocks in the
market place are rising off 3 year lows. If the strategy itself is to buy
and hold, at what point to you purchase the list (or the stocks from the
list with EPS+RS>=190, AD>=A)? Why April 21? A strategy has to be robust in
all time periods. What if the IBD100 had been published in early March 2000?
What if I'd purchased the EPS+RS  stocks or the entire list and held on to
them since then? What sort of returns would I be sitting on now?

Why not purchase the stocks on 12/17/01 or 12/24/02 or any other date? What
happens when a stock enters and leaves the list? When would one exit? How
often would one reconstitute their portfolio? If instead of buying and
holding the entire list on 4/21, what if instead I'd purchased each and
every stock as it broke out of a sound base on volume? How would I have
caught a breakout like TALX when the RS at the time of its breakout was a
measely 53? That flies in the face of mining a la CANSLIM rules, yet the
IBD100 list doesn't recognize that.

Another example of this is the IBD weekly review index. The assumption for
that index measure is that in order to achieve the same results as the index
one would have to (1) buy the entire list and (2) buy and sell the
components of the list as they were added or deleted. The index returns also
do not take into account the transaction costs of buying and selling each
individual equity as the portfolio is jiggered from one week to the next.

Numbers like these you quoted are useful in demonstrating that these *kinds*
of stocks are doing well in the market since 4/21, but they don't represent
a realizable return on an actual "strategy."

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Gene Ricci
Sent: Tuesday, June 17, 2003 4:07 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] IBD Top 100


Has any been bold enough to just buy and hold the top stocks from the IBD
Top 100 list on the next day's open?  Here's some data from two sources:

If purchased on April 21 you would be up 25.42% and still holding on to them
(no stops applied).

Minimal criteria  EPS+RS => 190 and A/D => A.   6 positions with 25.42%
gain:  HITK GRMN SSYS TARO BCGI (loser but basing) JBSS.

If purchased on April 11, 2003 you would be up 35% (same as above criteria):
HITK COH TARO

How's this.... if you bought all of the stocks you would be up 16.4%.

regards,
Gene

P.S. data is a couple of days old.


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